ARIZONA STATE SENATE
Fifty-Fifth Legislature, First Regular Session
escrow accounts; manufactured homes; requirements
Purpose
Outlines requirements for a mobile home park owner who is, or owns, a dealership to sell manufactured homes, mobile homes and factory-built buildings designed for use as a residential dwelling (residential factory-built buildings), including requiring the owner to use either a trust or escrow account.
Background
A licensed dealer of factory-built buildings, manufactured homes or mobile homes must establish an independent escrow account with an independent financial institution or escrow agent for each transaction involving: 1) a new manufactured home; 2) a residential factory-built building; and 3) a previously-owned manufactured home, mobile home or residential factory-built building with a purchase price of $50,000.
A mobile home park owner who is or owns a dealership licensed to sell new units (park owner-dealer) may sell a new manufactured home or new residential factory-built building without complying with escrow account requirements if: 1) the home will be sited in the park owner's mobile home park; 2) the park owner has required information on file with the Arizona Department of Housing (ADOH) to show that the park owner holds, owns a majority interest in or is controlled by an entity with a controlling interest the dealer license; and 3) the licensed dealership has posted with ADOH a dealer bond of at least $100,000 covering sales by parks sharing common control (A.R.S. 41-4030).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1.
Requires a park owner-dealer selling a new manufactured home or new
residential
factory-built building to:
a) maintain a licensee's trust account or open an escrow account with an independent financial institution or escrow agent in Arizona; and
b) deposit, in the trust or escrow account, earnest monies for the sale of manufactured homes, mobile homes or residential factory-built buildings.
2. Increases, from $100,000 to $150,000, the dealer bond amount the licensed dealership of a park owner-dealer must post with ADOH if the park-owner dealer is selling a new manufactured home or new residential factory-built building.
3. Outlines the following criteria for a park owner-dealer to sell mobile homes, previously-owned manufactured homes and previously-owned residential factory-built buildings:
a) the home will be sited in the park owner's mobile home park;
b) the licensed dealership has posted with ADOH a dealer bond of at least $150,000 covering sales by parks sharing common control;
c) the park owner has filed with ADOH the name and address of all owned mobile home parks, the dealership name, address and license number, and documentation to show that the park owner holds, owns a majority interest in, or is controlled by an entity with a controlling interest in the dealer license;
d) the dealer must maintain a licensee's trust account or open an escrow account with an independent financial institution or escrow agent in Arizona; and
e) deposit, in the trust or escrow account, earnest monies for the sale of manufactured homes, mobile homes or residential factory-built buildings.
4. Requires a licensee handling a mobile home park owner-dealer transaction to disclose in writing and by the time the purchaser signs the purchase contract that:
a) the purchaser may request in writing the use of an independent escrow account; and
b) the transaction will otherwise be handled through a trust account controlled by the licensee.
5. Requires a dealer to comply with a purchaser's written request to establish an independent escrow account if:
a) the dealer receives the request by the time the purchase contract is signed; and
b) the seller consents.
6. Requires ADOH to audit each park owner-dealer's trust or escrow account at least once every two years, including any transactions with an independent escrow account.
7. Makes technical and conforming changes.
8. Becomes effective on the general effective date.
House Action
COM 2/2/21 DPA 10-0-0-0
3rd Read 2/11/21 60-0-0
Prepared by Senate Research
March 1, 2021
LB/kja